GRPN: Legg’s Miller Lauds ‘Tremendous Opportunity’

By Tiernan Ray

In case you missed it, legendary value investor Bill Miller of Legg Mason was on CNBC early this morning talking positively about both Apple (AAPL) and Groupon (GRPN), both of which are responding positively today.

Groupon stock is up 40 cents, or almost 8%, at $5.48, and briefly touched as high as $5.54.

I’m more attracted to the stuff that has warts on it, hair and all that. I like Groupon, I like Groupon a lot. Yearh. You know, I liked [recently departed Groupon CEO] Andrew [Mason]. I think Andrew is a little quirky, I think Andrew is a very smart guy. I think he did a great job building the business. It may be the business is a little too complex for a guy who’s 31, 32 years old. [Chairman] Eric Lefkofsky, one of the other guys who’s taken over as interim chairman, he’s full on-board there, I think, now, and probably at least through the end of the year. But Groupon’s got $1.2 billion of cash, they’ve got no debt, they’ve got an enormous addressable market. I think their data analytics are very good. They’ve got folks, we knew at Amazon.com (AMZN), we’ve owned Amazon forever, who are there, Jason Child, the CFO, for example. And so, the opportunity at Groupon is tremendous. I think take rates will probably be going up again this quarter. I think expectations are low, the stock is very cheap, I didn’t do it on the IPO. Our average cost is around $5, right around where it is right now.

When it was presented to miller by the hosts that Groupon is not the sort of stock he tends to be known for investing in, Miller responded, “Well, you know, the world changes.”

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Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.